Over $1.0 million dollars of that amount is directly associated with purchasing water for distribution. The remaining portion of the budget requirements are used to provide administrative services, operate a fleet of construction and maintenance equipment, perform repairs and maintenance and pay personnel costs associated with operation of the water system.

As with all other utilities today, we must also replace and upgrade our infrastructure which includes water mains over 100 years old. We have implemented a 25 year plan to accomplish that monumental task which is expected to cost in excess of $10.0 million dollars.

We have developed a unique plan to implement this program. Rather than depend on traditional methods of borrowing to fund major construction projects, we have developed a restricted asset fund into which we regularly deposit funds that accumulate interest, and when sufficient funds are available we utilize those finds to implement construction projects to upgrade and replace water mains, pumping stations, water storage facilities, vehicles and equipment. This methodology not only lets us plan projects more effectively, but results in substantial savings in Bond interest costs. In essence, we pay ourselves the interest that is earned on the investments from the fund and utilize that for additional construction. This results in virtually more than doubling the amount of construction that can be accomplished for the same amount of money spent, than if borrowed through bonding.